Informal economy in the CBD and its contribution to local economic development in Bloemfontein
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Date
2021
Authors
Shounyane, Tsholofelo Confidence
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
As a developing nation, South Africa is faced with the triple challenges of unemployment, poverty, and inequality. Therefore, the informal economy is a critical sector for the country to provide livelihood, income and job opportunities for millions of unemployed people and business owners. The South African economy has always catered to developing and establishing formal businesses that meet minimum standards such as registration. Since 1994 when the transition to democracy took place, Local Economic Development has been raised from an isolated development intervention to a mandate enforced for all South Africa’s local authorities. Without any economic activities in the formal sector, unskilled, poor and marginalised South Africans would rely on the informal economy and social grants for survival. Due to its easy access, the informal economy provides various economic activities for the poor. • The main objective of this study was to examine the informal economy in the Central Business District (CBD) and its contribution towards Local Economic Development (LED) in Bloemfontein. The sub-objectives included: to investigate the role of the informal economy for Local Economic Development; to examine the state of informal economy in South Africa, to analyse the importance of informal trading towards economic development in Bloemfotein, to examine the type of support and offer recommendations for informal economy in Bloemfontein CBD. A qualitative study using non-probability sampling was carried out on a sample of 20 informal traders and 5 government officials in the Central Business District of Bloemfontein. Informal traders were selected using a snowballing sampling procedure. Semi-structured interviews using questionnaires were conducted. The research objectives were analysed using a qualitative approach. The results show that informal traders are not supported to their satisfaction. To some extent, no support reaches them; hence the challenge of expansion and combating the triple challenges becomes hard to reach. Further results show a disconnection between local governments and an indication of a strained relationship. Therefore, the study recommends that the government partner with relevant players to execute their policy plans on informal economy. These players may vary from infrastructure development to primary producers and high-end supermarkets. Informal traders are urged to formalise their businesses to leverage their support and opportunities presented by the government.
Description
Dissertation (MDS (Development Studies))--University of the Free State, [2021]
Keywords
Developing nation -- South Africa, Local Economic Development (LED) -- Bloemfontein, Informal economy in the Central Business District (CBD) -- Bloemfontein